Judge Grants Costco’s Motion to Dismiss Misleading Labeling Suit

A judge granted Costco’s motion to dismiss a suit filed against them on Monday in the Northern District of California. Plaintiff Ankush Puri filed suit earlier this year, alleging that Costco had falsely advertised their chocolate almond dipped vanilla ice cream bars since the chocolate in the product consists mainly of “ingredients consumers do not expect in chocolate – vegetable oils.”

While real chocolate is said to offer health benefits, the plaintiff explains that vegetable oils do the opposite, and are “known to result in numerous health problems.”

The complaint cited violations of the California Business & Professions Code, the California Civil Code, breach of express warranties, breach of implied warranty of merchantability, breaches of Magnuson Moss Warranty Act, fraud, and unjust enrichment. Puri was seeking class certification, favorable judgement on all counts, declaratory and injunctive relief, restitution, disgorgement, compensatory and punitive damages, litigation fees, and any other relief the Court deemed proper.

After a prior motion to dismiss was addressed by the plaintiff filing an amended complaint, the defendant, Costco, filed another motion to dismiss the amended complaint, arguing that “Puri fails to state any claim because the Product is not misleading, Puri’s claims are preempted, Puri lacks standing to seek injunctive relief, and Puri has failed to comply with the requirements of the CLRA for seeking money damages.”

On Monday, United States District Judge Edward J. Davila granted Costco’s motion to dismiss the suit on the grounds that Puri’s claims were preempted and that neither of the regulations Puri cited in the suit “support a viable theory of liability.” Judge Davila also noted that the complaint failed to properly state a deceptive labeling claim. Puri has the opportunity to amend his complaint “to allege a statute or regulation that requires “chocolate” to be made chiefly from cacao beans,” which he must do by January 3, 2022 in order to further pursue the litigation.

Puri is represented by Sheehan & Associates, P.C. and Shub Law Firm LLC. Costco is represented in the litigation by Foley Hoag LLP and the Law Offices of Gregory J. Ryken.